GRABTAXI: A TAXI REVOLUTION IN THAILAND

DANUVASIN CHAROEN

Ph.D. NIDA Business School, Thailand

Abstract- The study investigates the business process and business model of GRABTAXI. The paper also discusses how the
company implemented strategies to gain competitive advantages. The data were derived from the analysis of secondary data
and the in-depth interviews among the staffs, taxi drivers, and key customers. The findings indicated that the company’s
competitive advantages came from being the first mover, emphasising the ease of use and tangible benefits of the
application, and using network effect strategy.

Keywords- Taxi, Mobile Application, Thailand, Taxi Application.

I. INTRODUCTION

Taxis are considered one of the primary modes of

transportations in any metropolitan area. In Thailand,
there are 109,518 registered taxis, and more than
106,141 taxi drivers or almost 97% of all taxi drivers
provide service in Bangkok, the capital of Thailand
(Wikipedia, 2015). Taxi drivers in Thailand are
notorious for bad service, such as cheating on
customers, rejecting customers, or having bad Theory of Reasoned Action (TRA)
manners (Thailand). In addition, most women do not The TRA is based on social psychology literature and
want to use a taxi alone. Nonetheless, taxi drivers improves the predictive and explanatory function of
have been requesting higher compensation. the expectancy value theory. It is a model which
states that “a person’s performance of a specific
Since 2007, there has been an explosive growth of behavior is determined by his or her BI to perform the
smartphones in Thailand, and there has been an behavior ” (Davis, 1989)). Eveland ( 1986 ) observed
increasing number of mobile application users among that “ultimately, technology transfer is a function of
iPhone and android users. Furthermore, many mobile what individuals think—because what they do
applications facilitate the use of taxi services, such as depends on those thoughts, feelings and interests”
UBER, GRABTAXI, and All Thai Taxi. More people (Eveland, 1986) (p. 310).
in Thailand are more willing to use taxi mobile
service applications rather than the traditional method
because the mobile apps provide comfort, security,
and ease of use.

II. LITERATURE REVIEW

Expectancy-Value Theory
The expectancy-value theory was created to attempt
to understand the underlying motivation to change the
behavior of individuals. The theory explains why
users accept or reject information technology. The
major critical component is “Behavioral Intention”
(BI), which is the denominator for a particular
behaviour: “Individuals choose behaviors based on
the outcomes they expect and the values they ascribe
to those expected outcomes” (Borders, Earleywine, &
Huey, 2004) (p. 539). Expectancy is “the
measurement of the likelihood that positive or
negative outcomes will be associated with or follow
from a particular act” (Mazis, Ahtola, & Kipple,
1975) (p. 38). The intensity of the expectancy and the
value related to the outcome determine the intensity
of the tendency to act or use. (Mazis et al., 1975) (p.
38).
The TRA, shown in the figure above, states that a
person’s beliefs and evaluations lead to his/her
attitude (A) toward the behavior, which in turn leads
to Behavioral Intention. Normative beliefs and
motivation influence the subjective norm (SN), which
also influences BI. The SN is considered to be the
influence that others will have on the acceptance
decision of users, and acceptance may be affected by
peers, subordinates, or superiors. Beliefs in the model
are classified as “the individual’s subjective
probability that performing the target behavior will
result in consequence i” (Davis, 1989) (p . 984). BI is
determined by the person’s attitude (A) and SN
concerning the behavior in question (Davis et al.,
1989). Attitude toward behavior is a factor of the
individual’s “salient beliefs (b i ) about consequences

Proceedings of TheIRES 8th International Conference, London, United Kingdom, 30th Aug. 2015, ISBN: 978-93-85465-83-3
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 GRABTAXI: A Taxi Revolution In Thailand
of performing the behavior multiplied by the
evaluation ( e i ) of those consequences ” (p. 984). SN
is influenced by the user’s normative beliefs (nb i),
which are the perceived expectations of specific
individuals and groups, and the user’s motivation to
accept these expectations (Davis, 1989).
Technology Acceptance Model
The TAM improves on the TRA with the objective
“to provide an explanation of the determinates of
computer acceptance that is general, capable of
explaining user behavior across a broad range of end-
user computing technologies and user populations,
while at the same time being both parsimonious and
theoretically justified” (Davis et al., 1989, p. 985).
The major difference between the TAM and TRA is
the omission of the subjective norm (SN) component
of the TRA. Davis (1989) stated that “[i]t is difficult
to disentangle direct effects of SN on BI from indirect
effects via A” (p. 986). The similarity between the
TRA and TAM is that both believe that BI is the
critical factor in determining the actual usage of
technology. The TAM is shown in the Figure below:
Network Effect
In network economics, the cost of adding any user to
the network is insignificant, while the gain in value is
relatively much larger. The Internet itself is an
example of a successful implementation of network
economics. The more people participate, the more
valuable and essential a commodity it is. If a
company were to provide a service through the
Internet such as an application, the costs to the
company of adding another user would be small (as
the software infrastructure or application is already
built), and the more users that are signed up, the more
profit is made (Shapiro & Varian, 1999).
III. RESEARCH OBJECTIVES
The objective of this paper was to investigate
GRABTAXI’s business model and how GRABTAXI
creates competitive advantages.
IV. RESEARCH METHOD
This is a qualitative, narrative study. The data
collection consisted of an interview, focus group
study, document analysis, and the recording of the
researcher’s observations. The qualitative data were
analyzed using the thematic coding method. Atlas.ti
Proceedings of TheIRES 8th International Conference, London, United Kingdom, 30th Aug. 2015, ISBN: 978-93-85465-83-3
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was used to analyze the data. The themes were
identified based on the pattern of data.
Company’s Background
GRABTAXI was founded by Anthony Tan and Tan
Hooi Lin. It is a mobile e-hailing application
available in Malaysia, Singapore, Thailand, Vietnam,
Indonesia, and the Philippines (Wikipedia, 2015).
The application provides a booking service and
dispatch platform for the taxi industry. The vision of
GRABTAXI is to revolutionize the Southeast Asian
taxi industry by making it a safer and more efficient
means of transport. In March 2015, the number of
registered taxis in the GRABTAXI network reached
75,000, and the number of mobile app users increased
to 3.8 million users in the Southeast Asia region (Tay,
2015). The app is available from both Android
google play, Blackberrry World, and Applie iOS.
How GRABTAXI Works
Using the GPS technology with the mobile
application helps the passengers that like to use taxi
services to be able to call for a pick-up service. To
provide a safe environment, the app provides the
“Track My Ride” system, which keeps track of the
journey. GRABTAXI finds the nearest taxi of the
passenger’s current location and the system show the
drivers nearby that are interested in the booking. The
application displays information such as the driver’s
name, car plate number, phone number, and estimated
fare.
The roles of information technology
The application utilizes GPS (Global Positioning
Systems) to identify the nearest taxi and the shortest
route direction to the customer’s location. The system
also tracks the route to provide safety to the
customers.
V. BUSINESS PROCESS
There are 2 major parties using the GRABTAXI
application as follows:
1. Taxi Drivers
Each driver that would like to be a GRABTAXI
driver has to visit the head office to register and
submit the required documents. Each driver will
receive a credit of 200 Baht (approximately $6) after
 GRABTAXI: A Taxi Revolution In Thailand
registration as a welcome gift. Credit will be
redeemed by 7 Bath with each passenger pick up.
Everyone has to top up to maintain credit of not lower
than Baht 7, or else the driver will not be able to pick
up the passenger (they will not be listed in the
application). Every driver registered with the
GRABTAXI application appears on the location map
so that passenger can see the driver’s location. If a
driver would like to pick up a passenger, he or she
has to confirm with a booking application. Then, the
driver can see the passenger’s contact number. After
the trip is finished, the driver has to confirm that he or
she has already taken the passenger using the
application.
2. Passengers
First, a passenger has to download and register his or
her personal information, such as name, email, and
contact number in the mobile application. Then, the
passenger receives an activation code on his/her
mobile phone to ensure the authenticity of the phone
number. When the passenger would like to book a
taxi, he or she can just select the pick-up and drop-off
location, and then wait for a taxi to confirm the
booking.
The application then finds the taxi driver nearest the
pick-up location, and then sends the driver
information, i.e. full name, photo, car plate number,
and contact number. Every booking costs 25 Bath ($
0.7) in addition to the taxi meter rate. The reason for
the booking fee is for drivers to be able to cover their
expense driving to pick up passengers at the pick-up
locations.
In addition, GRABTAXI provides safety, speed, and
accountability, as the best taxi booking service in
Bangkok. For example, when it is raining, the
passengers do not need to go outside to find taxis.
The fairs need to be paid to taxi drivers directly after
each service.
Strategies
1. Providing Quality Service
The core value of GRABTAXI is “speed, safety and
certainty.” The system provides the driver’s detailed
information such as the driver’s name, phone number,
plate number, and expected fare. In addition, the
customer can provide feedback by rating the driver in
the app and the result is shown through social media.
This holds the taxi drivers accountable for their
actions. Moreover, the app also provides flexibility of
payment by offering both cash and credit card
payment (Toyad, 2015; Tung, 2015).
2. Tapping Into a Large Customer Base
GRABTAXI successfully utilizes mobile application
through smartphone platforms. In addition, it has the
advantage of being the first mover in this business.
The application provides coverage for Southeast
Asian countries including Singapore, Malaysia, the
Philippines, Thailand, Vietnam, and Indonesia. The
entire population is almost 500 million people. Most
Proceedings of TheIRES 8th International Conference, London, United Kingdom, 30th Aug. 2015, ISBN: 978-93-85465-83-3
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of the people in this region live in metropolitan areas.
Moreover, GRABTAXI has integrated Grabcar, a
premium service application that enables passengers
to book a limousine service in its existing mobile app
to maximize its customer database (Tung, 2015).
3. Market Positioning
The mobile application is tailored to only people in
the Southeast Asian region. This means that the
company can deliver specific needs to the customers
in the region (Tung, 2015).
Competitors
There are many competitors and substitute products
in the taxi industry. The major competitors are Easy
Taxi and UBER. Easy Taxi, established in 2011,
provides a similar service as GRABTAXI. However,
it was not popular in Southeast Asia because of the
lack of marketing and promotions. Nevertheless,
based on the interviews with the taxi drivers, many
taxi drivers that have experienced the application
confirm that the system is easy to use. Another
competitor is UBER, established in 2009. Uber is a
global company operating in North America, Central
America, Europe, and Asia Pacific. UBER focuses on
limousine services. Another competitor is All THAI
TAXI, established in 2015. This application provides
premium taxis with cars such as Toyota Prius.
However, the application was only available in the
Android operating system.
Findings
Due to much dissatisfaction with the taxi driver
service in Thailand, such as lack of a service-mind,
rejecting picking up a passenger, security issues, and
so on, these reasons could have affected passengers’
point-of-view, especially foreigners as Thailand is
one of the most notable tourist destinations.
According to the research in conducting a survey of
140 samples, most of the passengers reported that
they do not need to worry if the taxi drivers will pick
them up or not. The application provides a guaranteed
service. The next issue is security, and the
GRABTAXI application offers real-time location
services and customers can share this information
with their friends or family members. Especially,
many female passengers report that they feel safer
when using GRABTAXI. Furthermore, GRABTAXI
provides many payment options for the customers.
The customer can choose to pay cash to the drivers
directly or they can pay with credit cards. According
from the interview with the GRABTAXI staff, they
reported that the number of application downloaders
has been increasing gradually, both taxi drivers and
passengers. Especially taxi driver registration
numbers have greatly increased—from 700 to over
12,000 from October 2014 to April 2015.
GRABTAXI expects that this number will grow
continuously due to brand awareness, partnerships,
ease of use, and security.
 GRABTAXI: A Taxi Revolution In Thailand
However, the GRABTAXI application still has many
problems and limitations. The interview results
indicated that most of the taxi drivers do not have
sufficient skill or education to use the technology,
and there are therefore many constraints due this
issue. For instance, taxi drivers cannot use the
application to top-up the credit by themselves since
they cannot understand how to navigate the
application. As a result, they need to visit the
headquarters every time they have to top-up their own
credit. This issue also has led to a decline in the
number of taxi drivers using this application. In
addition, there are many taxi drivers that have never
purchased a smartphone or even used one before.
Furthermore, many customers report system failure
and location service failure in the application.
Marketing Strategy
GRABTAXI has been promoting itself using social
media such as Facebook, Twitter, and other online
advertisements. Most of their promotions are in the
form of discounts provided to passengers. According
to the interview, this method went well at the
beginning; however, it led to the company’s net loss
since GRABTAXI receives only 7 Bath ($ 0.2) per
trip. The revenue could not cover the operating
expenses. Moreover, those reached customers only
used the application when they got the discount code.
VI. DISCUSSION
According to the findings GRABTAXI has created a
competitive advantage, not only from being among
the first movers but also because of its ease of use
and the usefulness of the application. This is
congruent with the technology acceptance model
(TAM). The company also has used the two-sided
network effect strategy to attract both taxi drivers and
passengers that use smartphones. GRABTAXI began
the network effect from the taxi drivers by giving
them incentive and motivation to join the network. In
the beginning, the drivers had no expense in joining
the network. Once GRABTAXI had enough taxi
drivers in its network, it was able to attract passengers
that use smartphones.
Recommendations
Although many taxi drivers can see an obvious
benefit in joining GRABTAXI, GRABTAXI should
provide training for the taxi drivers so that they do
not have to travel to the headquarters every time they
face problems. In addition, the application interface

Proceedings of TheIRES 8th International Conference, London, United Kingdom, 30th Aug. 2015, ISBN: 978-93-85465-83-3
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can be made easier to use. Furthermore, for the taxi
drivers that do not have a smartphone, GRABTAXI
should offer one. In addition, a business model like
GRABTAXI is no longer “new,” and the company
should introduce a swing cost in the form of “points”
or “rewards” to ensure that the drivers and customers
continue using the application even when there are
many emerging competitors.
CONCLUSIONS
This case research describes the business process and
business model of GRABTAXI. The success of the
application comes from achieving perceived ease of
use and perceived usefulness among customers
through the features and quality of the services. The
company uses a niche strategy by focusing only on
customers in the Southeast Asia region. The
application also utilizes the network effect strategy by
tapping into a large customer and taxi-driver base.
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